America, by and through Assistant United States Attorney, MariettaParker, and James P. Ludwig, the defendant, personally and by and through defendant's counsel,Jason Billam, hereby enter into the following plea agreement pursuant to Rule 11

of

the FederalRules

of

Criminal Procedure:

1.

Defendant's

Guilty Plea. The defendant agrees to plead guilty to Count(s) Oneand Two

of

the Information charging a violation in Count One

of

Title 18, United States Code,§ 371, that is, conspiracy to commit wire fraud and money laundering and in Count Two

of

Title42

U.S.c.

§ 408, Social Security benefit fraud. By entering into this plea agreement, thedefendant admits to knowingly committing this offense, and to being guilty

of

this offense. The

defendan\

understands that the maximum sentence which may be imposed as to each count,

of

the information, Counts One and Two, to which the defendant has agreed to plead guilty is notmore than five (5) years

of

imprisonment, a $250,000 fine, three (3) years

of

supervised release,and a $100 mandatory special assessment.2.

Factual

Basis

forthe

Guilty Plea. The parties agree the facts constituting theoffense to which the defendant is pleading guilty are as follows:

Case 2:08-cr-20019-CM-DJW Document 14 Filed 04/21/2008 Page 1 of 11

r

Count One

During the period beginning on or about January

8,2004,

and continuing until onor about November

28,2005,

in the District

of

Kansas and elsewhere, thedefendant, knowingly and willfully conspired and agreed with other persons,including Carrie Neighbors, and others known and unknown to commit andconceal an offense against the United States, that is: to commit the crime

of

wirefraud in violation

of

Title 18, United States Code, Sections 1343 and 2 and moneylaundering in violation

of

Title 18, United States Code, Section 1956 and 2.

It

was part

of

the conspiracy that the defendant would steal various items,including tools, cameras and electronics, from retail establishments in the District

of

Kansas and elsewhere, would sell the stolen items to Carrie Neighbors andothers working at a business called Yellow House Quality Appliance in Lawrence,Kansas, where he would receive payment for the stolen items by check written onaccount No. XXXXX0223 held in the name

of

"Yellow House Quality ApplianceGuy or Carrie Neighbors" at the Commerce Bank in Lawrence, Kansas.Thereafter, the defendant would cash the check to disguise the nature and location

of

the proceeds obtained from the sale

of

the stolen property.

In

order to furtherdisguise the nature and location

of

those proceeds, the defendant would then usethe cash to pay bills or to purchase various items for his own use.

In

furtherance

of

the conspiracy and to effect the objects

ofthe

conspiracy, thefollowing acts, among others were committed in the District

of

Kansas andelsewhere:On or about the following dates, in Lawrence, Kansas and elsewhere, thedefendant, caused the transmission in interstate commerce by means

Yellow House QualityAppliance.The defendant stipulates and agrees that the cash payment he receivedwhen he negotiated each check represented proceeds from the sale on eachoccasion

of

stolen tools and cameras to Carrie Neighbors at Yellow House QualityAppliance. Thereafter, the defendant spent the proceeds from the sale

of

stolentools and cameras by using them to pay debts and to purchase items so that hecould disguise the nature and location

of

those proceeds.The defendant further stipulates and agrees that, as a result

of

his schemeand artifice, the he obtained approximately $102,000 in proceeds from YellowHouse Quality Appliance representing approximately 50%

of

the retail value

of

the stolen merchandise.

Count

Two

On or about March 5, 2004, the defendant applied for early Retirement andSurvivor's Insurance (RSI) benefits from the Social Security Administration. TheApplication for benefits signed by the defendant contained the following pertinentparagraph:I understand that SSA will use the earnings reported to SSA by

my

employer(s) and my self-employment tax return

(if

applicable) asthe report

of

earnings required by law, to adjust benefits under theearnings test. I also understand that it is my responsibility toensure that the information I give SSA concerning my earnings iscorrect. I also understand I must furnish additional information asneeded when my benefit adjustment is not correct based on theearnings on my record.Because the defendant was drawing RSI benefits before reaching his fullretirement age

of

65 years, 10 months, he was subject to the Social SecurityRetirement test for the period from March, 2004 through December, 2007. TheSocial Security Retirement test limits the amount

of

annual income a beneficiarymay earn prior to reaching full retirement age, which in the defendant's case was$11,640 for calendar year 2004, $12,000 for year 2005, and $12,480 for year2006.Between

May

6, 2004, and December 31, 2004, the defendant receivedincome in the amount

of

$68,641.30 from the sale

of

stolen merchandise toYellow House Quality Appliance and $28,145 between January